One of the best life insurance money saving tips is making sure you need it
If you're thinking of taking out a life insurance policy, before you sign on the dotted line, make sure you understand why you're taking out life insurance and, if indeed, you need to.
While aggressive insurance salespeople will insist you must have a policy, one of the best life insurance money saving tips is not to take out insurance in the first place. Not unless you have a good reason for doing so.
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Do you need life insurance?
When people do research about life insurance money saving tips, oddly, one of the tips they don't consider is asking themselves the question "Do you really need life insurance?" Here's what you need to know to figure out if you do.
Who will get the payout? - Are you single or married? If single, do your mum and dad still need your income should you die?
Let's face it, even though insurance agents will tell you life insurance is "a must" unless, when you die, someone is going to be hurting financially because of your death, it's not.
If you're married and your spouse or children will be devastated financially without your income then, yes, you could need life insurance. If you're single, have no dependents, or any family members who need the cash, no, you don't need life insurance.
Do you need life insurance with a mortgage? - Thousands of life insurance representatives will insist you must have life insurance if you're taking out a mortgage. Wrong. There's no law that says you have to.
Of course, if you're married and your spouse couldn't afford the monthly mortgage payments if you died, yes, a life insurance policy may be a good idea. But, are there other ways your spouse can pay it - with a widow's pension, or as part of an insurance policy you have through your employer for instance? Check all other options before taking out what could be a very costly insurance policy.
Does your job cover you? - Some companies do pay the deceased's dependents 'death benefits' if an employee dies, particularly if the death occurs on the job. If your occupation is dangerous, there's a good chance your family would receive a payout if you were killed on the job. Your boss can tell you if they would. Again, if you're single, it may not matter.
Check other policies - Before you take out a new life insurance policy, look at other policies you have to make sure you're not already covered. It's amazing how many people don't know they've got life insurance and hand over money for a second policy.
Life insurance is not a good investment?
Finally, if an insurance agent is telling you what a great investment buying a life insurance policy is, don't believe him. The returns on most life insurance policies are terrible and, in many cases, you'd do better just putting your money in a savings account, if you don't want to deal with the stock market that is.
That's why, one of the best life insurance money saving tips around is this - don't believe everything your life insurance agent tells you. He's probably in it for the commission.